A volatile day

Markets have had quite  ride last 24 hours.Markets interpreted Draghi Speech as hawkish but only to be told  12 hours later that in fact it was a neutral  Message. Bank OF England Carney reminded traders that they too are leaning hawkish by saying “Some removal of BOE stimulus may be necessary” One tide lifts all now as central banks turn hawkish all Bonds are sold,Dollar and stocks sells off .

US stocks have recoup much of yesterdays losses in fact SPX is trading right up near yesterday’s highs .NDX    $20 away from yesterday’s highs. Today FANG +1%,Risk on/Off  Index +2.5% ,Trump  basket +1.5% and Most shorted stocks Index +1.85.Possibility of Higher rates has lifted the banking sector. It is your sector leader today in Both Europe and US. Dollar is still heavy down ~40 ticks as the thought process is something like this .FED in Middle of rate hike cycle and markets may be priced too aggressive with Hikes. Whereas ECB just starting to think of higher rates and maybe act sooner than market thought so Euro needs to be trading higher.Just some thoughts.

 

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